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OnlyMe

Fifteen Years To Revert To The Mean

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Let us not forget the new paradigm of 1.6 trillion debt in the UK. Fifteen years will be optimistic.

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What a great read from 2005.

The Steps outlined are spot on so far.

We've gone past Step A and are now firmly in Step B:

Step B: As housing prices begin to decline, sales will continue, though more slowly and less frequently. Old habits die slowly. One year into the decline, housing speculators will have left the market, but home owners will generally still believe that prices will either resume their rise or at least flatten out, not continue to decline. Remember the first year of the stock market bubble decline, when most people hung in there until they'd lost all of their money? The first lesson of behavioral finance is that the most common mistake made by market participants is to hang on too long and fail to cut losses.
While home owners at this stage will borrow less against their houses, and loans will be more difficult to come by, the average home owner will still make frequent trips to Home Depot or hire contractors to make home repairs and improvements, believing they'll "get their money back" in an increase in the value of their home at least equal to the cost of fixing it. Some home owners will put their home up for saleā€”if they purchased early enough in the boom so that they can still realize a profit, even selling at five to twenty percent below the peak price.

If this writer continues to have got it exactly right, then we'll be bottoming out at Step F in about 2017.

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What a great read from 2005.

The Steps outlined are spot on so far.

We've gone past Step A and are now firmly in Step B:

Step B: As housing prices begin to decline, sales will continue, though more slowly and less frequently. Old habits die slowly. One year into the decline, housing speculators will have left the market, but home owners will generally still believe that prices will either resume their rise or at least flatten out, not continue to decline. Remember the first year of the stock market bubble decline, when most people hung in there until they'd lost all of their money? The first lesson of behavioral finance is that the most common mistake made by market participants is to hang on too long and fail to cut losses.
If this writer continues to have got it exactly right, then we'll be bottoming out at Step F in about 2017.
My information is that housing speculators left the market about 4 months ago (the crash was only promising and they already knew) I am already hearing the it will get better in spring talk at work. but I don't think it will be 15 years, it is falling too fast and too hard. it is also in tandem with a general economic shrinkage and i think that the symbiosis between the 2 will ensure a painful 4 - 5 years.

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  • 395 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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